Microsoft lays out grounds for Activision’s appeal against UK regulator By Reuters

© Reuters. PHOTO: The Microsoft logo is visible on a smartphone placed on top of the Activision Blizzard display logo in this illustration taken January 18, 2022. REUTERS/Dado Ruvic/Illustration/

Sam Tobin

LONDON (Reuters) – Microsoft is challenging the UK’s decision to block a $69 billion takeover of Call of Duty maker Activision Blizzard based on “fundamental flaws” in Microsoft’s (NASDAQ:) cloud gaming valuation. services.

Britain’s competition authority, the Competition and Markets Authority (CMA), vetoed the deal in April, saying it could harm competition in the nascent cloud gaming market, sparking a furious scandal.

On Wednesday, Microsoft confirmed that it had filed an appeal against the ruling with the UK Competition Court of Appeal (CAT), and a summary of its reasoning was released on Friday.

According to the summary, the CMA’s conclusion that the deal would significantly reduce competition in the UK cloud gaming market is incorrect.

CMA “made fundamental mistakes in its calculations and estimates of market share data for cloud gaming services by not taking into account the limitations associated with native games (when gamers access games installed on their devices via digital download or physical disc). )”, Microsoft will say in the Competition Court of Appeal. I

Listing a total of five grounds of appeal, he also said it would cast doubt on CMA’s understanding of the cloud gaming market and the impact of the deal.

Rima Alayi, Microsoft Corporate Vice President and Deputy General Counsel, said the CMA’s decision was “misguided for several reasons, including an overestimation of the role of cloud streaming in the gaming market and our position in it, and its reluctance to consider solutions.” which received overwhelming support from industry and the public.”

“We are confident in the strength of our appeal and the commitment we have made to increase competition and choice for players today and in the future.”

Appeals from CMA decisions are heard by the Competition Court of Appeals, which decides on the merits of the decision, and Microsoft does not have the opportunity to present new remedies.

EU competition authorities approved the deal earlier this month after they accepted measures proposed by Microsoft that were broadly comparable to those proposed in the UK.

Microsoft also appealed the FTC’s blocking of the deal on the grounds that the agency said it would stifle competition.

The CMA reiterated its stance on Friday, with a spokesperson saying: “We have banned this deal as we had concerns that it would reduce innovation and choice in the UK cloud gaming market. We will defend our position in court.”